IRAS e-tax Guide Stamp Duty: Imposition of Stamp Duty on Sellers for Sale or Disposal of Residential Property
Published by Inland Revenue Authority of Singapore First published on 19 February 2010 Inland Revenue Authority of Singapore All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording without the written permission of the copyright holder, application for which should be addressed to the publisher. Such written permission must also be obtained before any part of this publication is stored in a retrieval system of any nature. 2
Table of Contents Overview 4 When Seller s Stamp Duty (SSD) Applies 4 Computation of SSD Amount 6 Payment Due Date 6 Residential Properties 6 Exemptions 6 SSD Payment Procedures 7 Audit 8 Frequently Asked Questions 8 Contact Information 8 Annex A : Glossary of Terms 9 Annex B : For e-stamping Subscribers 10 Annex C : For Non-Subscribers 11 Annex D : Frequently Asked Questions 14 3
1. Overview 1.1 Following the Government announcement on 19 February 2010, seller s stamp duty (SSD) will be payable by sellers of residential properties which are acquired (or purchased) on or after 20 February 2010 and disposed of (or sold) within 1 year from the date of acquisition. Properties acquired before 20 February 2010 will not be subject to SSD 1 when disposed of. 1.2 This Guide explains the circumstances under which SSD will apply and the procedures for paying SSD. 2. When SSD Applies 2.1 Please see the illustration below. : (A) Residential Property Under Construction OTP : Option To Purchase D : Developer SPA : Sale and Purchase Agreement A : Original Purchaser BSD : Buyer s Stamp Duty B : Sub-Purchaser SSD : Seller s Stamp Duty Developer (D) - D issued OTP to A on 10 Feb 2010. - A exercised OTP by signing SPA on 22 Feb 2010. Original Purchaser (A) - A has to pay BSD on SPA signed with D on 22 Feb 2010. - A has to pay SSD on OTP exercised by B on 25 May 2010. - A issued OTP to B. - B exercised OTP on 25 May 2010 - B signed fresh SPA with D on 15 Jul 2010. Sub-Purchaser (B) - B has to pay BSD on OTP exercised on 25 May 2010. SSD is payable by A because the property is acquired on or after 20 February 2010 and disposed of on 25 May 2010 which is within 1 year from the date of acquisition. 1 The purchase date or the date of sale refers to the date on which the Option to Purchase or Sale and Purchase Agreement is executed, as the case may be. 4
(B) Completed Residential Property OTP : Option To Purchase S : Seller SPA : Sale and Purchase Agreement A : Original Purchaser BSD : Buyer s Stamp Duty B : Sub-Purchaser SSD : Seller s Stamp Duty Seller (S) - S issued OTP to A on 10 Feb 2010. - A exercised OTP on 22 Feb 2010. Original Purchaser (A) - A pays BSD on OTP exercised on 22 Feb 2010. - A issued OTP to B. - B exercised OTP on 25 May 2010. Sub-Purchaser (B) - B pays BSD on OTP exercised on 25 May 2010. - A pays SSD on OTP exercised by B on 25 May 2010. SSD is payable by A because the property is acquired on or after 20 February 2010 and disposed of on 25 May 2010 which is within 1 year from the date of acquisition. 2.2 Acquisition or disposal of properties includes transfer of properties made in the following manner : (a) (b) (c) (d) (e) (f) (g) Direct sale or purchase; By way of a collective sale or purchase; By way of mortgagee sale; By way of gift, release, settlement or trust where the beneficial interest in the property passes to the beneficiary; By way of distribution in specie upon voluntary winding up of a company; By way of letter of authority; By way of exchange; 2.3 When the property is transferred by way of inheritance or under the right of survivorship in a joint tenancy, SSD will be payable if the property is disposed of within 1 year of the property being acquired by the deceased on or after 20 February 2010. 5
3. Computation of SSD Amount 3.1 SSD payable is computed in the same manner as the stamp duty payable by the buyer. For more information on stamp duty computation, please refer to the IRAS website at www.iras.gov.sg (Other Taxes Stamp Duty Calculate Stamp Duty). 4. Payment Due Date 4.1 SSD must be paid within 14 days of the execution of the Agreement (i.e. exercise of Option or signing of Agreement). If the Agreement is executed overseas, upon receipt of the Agreement in Singapore, the SSD must be paid within 30 days. 5. Residential Properties 5.1 Only residential properties are affected. Please refer to the Glossary of Terms in Annex A (page 9). Where part of the property is for residential use, only that part relating to residential use is subject to SSD. 5.2 Where the transaction relates to only a partial interest in the residential property, SSD will be payable on the consideration or the market value of the partial interest, whichever is higher. For this purpose, joint tenants are deemed to have equal interest. 6. Exemptions 6.1 SSD is to be exempted or remitted on i. A contract or transfer executed by a licensed housing developer where the sale of residential property is in accordance with the provisions of the Housing Developers (Control and Licensing) Act. ii. iii. iv. A contract or transfer executed by a non-licensed housing developer lawfully carrying out the business of housing development. A contract or transfer executed by any public authority which is established by written law and where the disposition of property is pursuant to the exercise of its functions and duties, e.g. HDB, JTC; Property passing on death of owner to persons who are beneficially entitled to the residential property, either by virtue of the Will or the laws of intestacy (subject to paragraph 9); v. A transfer by reason of land acquisition by the Government; vi. vii. Disposal upon the bankruptcy or involuntary winding up of the owner; Disposal by a foreigner as required under the Residential Properties Act 6
viii. ix. Disposal as a result of re-possession of HDB flat by HDB; Disposal of HDB flat to HDB under the Selective En-bloc Redevelopment Scheme (SERS); x. A transfer consequent to matrimonial proceedings (i.e. divorce) in which specific remission 2 for buyer s stamp duty has been granted to the transferee; xi. xii. xiii. xiv. Disposal effected via a conveyance direction in which specific remission 3 for buyer s stamp duty has been granted to the transferee;. A transfer of part interest in HDB flat to immediate family members in which specific remission 4 for buyer s stamp duty has been granted to the transferee. SSD in excess of $10 will be remitted; A transfer made in consideration of marriage in which buyer s stamp duty has been remitted for the transferee. SSD in excess of $10 will be remitted; Transfer made pursuant to a scheme of reconstruction or amalgamation under section 15 of the Stamp Duties Act in which relief for buyer s stamp duty has been allowed to the transferee; 7. SSD Payment Procedures 7.1 For e-stamping Subscribers Please use the same module as for paying buyer s stamp duty, with the additional step of inserting the word (SSD) after the name of the Vendor/Transferor/Assignor in Section C. For illustrations, please refer to Annex B (page 10). 7.2 For Non-Subscribers Please use the same prescribed Form E1A for stamping at CrimsonLogic Service Bureau or IRAS counter. Under Section C : Particulars of Vendor/Transferor/Assignor, please fill in the name of the Vendor/Transferor/Assignor, to be followed by the word (SSD). Complete the rest of the form as usual. For illustration, please refer to Annex C (page 11). 8. Audit 8.1 Audit checks will be conducted on documents relating to the sale or disposal of properties. If IRAS discovers cases of deficient SSD, IRAS would recover the deficient 2 Stamp Duties (Matrimonial Proceedings) (Remission) Rules 2005 3 Stamp Duties (Conveyance Directions) (Remission) Rules 2005 4 Stamp Duties (Transfer of HDB Flat Within Family) (Remission) Rules 2007 7
duty. Under the Stamp Duties Act, a penalty of up to 4 times the amount of deficient duty may be imposed. 9. Frequently Asked Questions 9.1 Please refer to Annex D (page 14). 10. Contact Information 10.1 For enquiries on this Guide, please contact : Property Tax Division Valuation and Stamp Duty Branch Inland Revenue Authority of Singapore 55 Newton Road Revenue House Singapore 307987 Tel : 6351 3697 / 6351 3698 Fax : 6351 3694 Email : estamp@iras.gov.sg Inland Revenue Authority of Singapore 8
Annex A Glossary of Terms 1. Residential Property means - (a) any house, building or other premises or any part thereof which is permitted to be used pursuant to the Planning Act (Cap. 232) or any other written law as a dwelling-house or which is lawfully so used; and (b) any land zoned in the Master Plan for solely residential purposes or for mixed purposes, one of which shall be residential. 2. Master Plan has the same meaning as in Section 2 of the Planning Act (Cap. 232). 3. Acquisition includes by way of purchase, grant, exchange, gift, settlement or otherwise. 4. Disposal means the sale, conveyance, transfer, assignment, settlement or other alienation of residential property, whether by agreement or otherwise, and includes the creation of a trust in respect of the property. 9
For e-stamping Subscribers : Annex B Step 1 : Select the Sale & Purchase of Immovable Property (Ad Valorem) module in the E-stamping system. Step 2 : Fill in all the particulars. Step 3 : Please insert (SSD) after the name of Vendor / Transferor / Assignor. 10
For Non-Subscribers : Annex C SAMPLE FORM E1A Commissioner of Stamp Duties 55 Newton Road, Revenue House Singapore 307987 Tel: 63513697/8 REQUISITION FORM FOR SALE & PURCHASE OF IMMOVABLE PROPERTY (AD VALOREM DUTY) FOR IRAS/SNS USE Date / / Queue No. Processed by Doc No. Please complete this Form in BLOCK letters Particulars of Person Submitting Document for Stamping Name Address Tel No. I certify that the information provided below is a true and accurate account of the transaction as they are recorded in the document. Please e-stamp the document with ORIGINAL $. Related Document Reference No. (if any, applicable to Law Firms only) DUPLICATE $. TOTAL $. Signature Name of Signatory Date SECTION A: DETAILS OF DOCUMENT FOR STAMPING Document Type: Sale & Purchase Agreement/Option to Purchase Letter of Authority Transfer/Assignment/Conveyance Is Document signed / YES NO If YES, Date of / / Option accepted Document/Acceptance D D M M Y Y Y Y Signed / Will be signed YES NO in duplicate? Document is signed in Singapore Overseas If Overseas, Date / / Document was received in Singapore D D M M Y Y Y Y 11
SECTION B: PARTICULARS OF PROPERTY ACQUIRED # Building: Blk/House No. Street Name Storey-Unit No. - Postal Code Vacant Land: MK/TS No. Lot No. PL/PT/Parcel No. Date of Contract / / / Acceptance of Option D D M M Y Y Y Y Purchase Price (S$). Share/Interest Acquired FULL FRACTION If fraction, state fractional / share/interest SECTION C: PARTICULARS OF VENDOR/TRANSFEROR/ASSIGNOR # Name T A N A H T E E ( S S D ) Identity Type: NRIC FIN PASSPORT UEN- UEN- UEN- OTHERS LOCAL CO BUSINESS OTHERS Identity No. Name Identity Type: NRIC FIN PASSPORT UEN- UEN- UEN- OTHERS LOCAL CO BUSINESS OTHERS Identity No. Please insert (SSD) after the name of the Vendor / Transferor / Assignor SECTION D: PARTICULARS OF PURCHASER/TRANSFEREE/ASSIGNEE # Name Identity Type: NRIC FIN PASSPORT UEN- UEN- UEN- OTHERS LOCAL CO BUSINESS OTHERS Identity No. Address: Block/House No. Street Name Storey -Unit No. - Postal Code 12
Name Identity Type: NRIC FIN PASSPORT UEN- UEN- UEN- OTHERS LOCAL CO BUSINESS OTHERS Identity No. Address: Block/House No. Street Name Storey -Unit No. - Postal Code SECTION E: 1998 OFF-BUDGET MEASURE (Applicable only for S&P Agreement/ Acceptance to Option to Purchase dated between 30.6.1998 to 14.12.2006, both dates inclusive) Duty on S&P Agreement/Option is now payable due to: 1) TOP issued YES NO If YES, state Date of / / TOP D D M M Y Y Y Y 2) Completion of Purchase YES NO If YES, state Date of / / Of Property Transfer / Assignment D D M M Y Y Y Y 3) Purchaser has contracted YES NO If YES, state Date of / / to sell property Sub-sale D D M M Y Y Y Y 13
Frequently Asked Questions Annex D 1. I have exercised an option to acquire an apartment before 20 February 2010. Does SSD apply to me if I dispose of the apartment within a year? No, because the apartment was acquired by you before 20 February 2010. SSD is only payable by the seller who has acquired the residential property on or after 20 February 2010, and disposed of within 1 year of purchase. For example, if you acquire the apartment on 1 April 2010 and dispose of on or before 31 March 2011, you would have to pay SSD. 2. For the sale and purchase of the property, which is the material date to be considered for this purpose of determining SSD is it the date of contract or date of transfer or date of possession of the property? The date of exercise of Option or the date of Acceptance of Option or the date of Sale & Purchase Agreement or the date of Contract would be taken as the material date in the sale and purchase of the property. 3. I have been given an option to purchase a house and intend to exercise the option on 20 February or later. Does SSD apply to me if I dispose of it within a year? Yes, SSD applies since the house will be acquired by you on or after 20 February 2010. If you acquire the house on 20 February 2010 and dispose of the house on or before 19 February 2011, you would have to pay SSD. 4. Does SSD apply if an apartment was given to me (i.e. transferred by way of a gift) and I dispose of the apartment within a year? If the apartment was given to you on or after 20 Feb 2010, you have to pay SSD if you dispose of the apartment within a year. 5. I have inherited a house from a deceased relative on 1 Apr 2010. Does SSD apply to me if I dispose of it within a year? If the deceased acquired the house before 20 February 2010, you would not need to pay SSD upon disposal. If the deceased acquired the house on and after 20 February 2010, you would have to pay SSD when you dispose of the house within a year of the acquisition of the property by the deceased. 14
6. Why is the cut-off date for the 80% Loan-to-Value (LTV) cap set on the date on which the option to purchase was granted whereas that for SSD is the date on which the option is exercised? The cut-off date for the 80% LTV cap is the date on which the property buyer is granted the option to purchase the property by the seller, or if there is no option to purchase, the date of the sale and purchase agreement. This cut-off would therefore not impact prospective buyers who have paid for the option to purchase before 20 Feb 2010, and are in the process of making financing arrangements to complete the purchase. This distinction was made in the 1996 slate of property cooling measures. 7. How is SSD computed? SSD is computed in the same manner as the stamp duty payable by the purchaser, at the following rates, on the consideration or the market value of the property, whichever is higher : - 1% on the first $180,000; 2% on the next $180,000; 3% on the balance amount For more information on the stamp duty computation for immovable properties, please refer to the IRAS website at www.iras.gov.sg (Other Taxes Stamp Duty Calculate Stamp Duty). 8. When must SSD be paid? SSD must be paid within 14 days of the signing of the Agreement. But if the Agreement is executed overseas, SSD must be paid within 30 days from the date of receipt of the Agreement in Singapore. 9. How do I pay SSD? For e-stamping Subscribers Use the same module as for paying buyer s stamp duty, with the additional step of inserting the word (SSD) after the name of the Vendor/Transferor/Assignor in Section C. Complete the rest of the form as usual. Step 1 Select the Sale & Purchase of Immovable Property (ad valorem) module in the E-stamping System 15
Step 2 Enter the details in the relevant fields as usual Step 3 Under Section C, in the field Name of Vendor/Transferor/Assignor, insert the word (SSD) immediately after the name of the vendor/transferor/assignor. Please refer to Annex B for illustration. For Non-Subscribers Please use the same prescribed Form E1A for stamping at CrimsonLogic Service Bureau or IRAS counter. Under Section C : Particulars of Vendor/Transferor/Assignor, please fill in the name of the Vendor/Transferor/Assignor, to be followed by the word (SSD). Complete the rest of the form as usual. Step 1 Use the prescribed Form E1A Step 2 Enter the details in the relevant fields as usual Step 3 Under Section C, in the field Name, insert the word (SSD) immediately after the name of the vendor/transferor/assignor. Please refer to Annex C for illustration. 16